Consumer concerns and activist campaigns have led to a rethinking within the palm oil industry itself

Consumer concerns and activist campaigns have led to a rethinking within the palm oil industry itself

Given the negative image of palm oil products in a number of EU countries, the industry is cautiously awaiting the implications of this new law

The most recent response to consumer concerns in Europe is the new Food Information Regulation (No ) that came into force in , which requires explicit listing on the label of all types of vegetable oil used in food products. This is coming amid depressed soybean oil prices, prompting some users to shift to soybean oil and lowering palm oil demand. As a response, the Malaysian government has announced in its intention to expand palm oil exports to smaller markets, such as Iran, Kazakhstan, Turkey, and Turkmenistan to reduce dependence on its traditional ).

SUCCESS AND LIMITATIONS OF CERTIFICATION SCHEMES

Since 2004, the RSPO certified palm oil (CSPO) accounted for 8.2 million tones (15%) from a total of 150 million tonnes from global production (RSPO 2015a). Many retailers made voluntary, time-bound commitments to source 100% certified sustainable palm oil (CSPO) by 2015 (Economist 2010). Some have reached this target, whereas others are using GreenPalm certificates as an interim measure while they work toward sourcing CSPO (RSPO 2015b). GreenPalm is a certificate trading program that allows the holder to purchase certificates (but not the actual certified palm oil) from certified growers. The governments of Indonesia and Malaysia have introduced their own sustainability standards. The Indonesian Sustainable Palm Oil (ISPO) is mandatory and aims to ensure that all Indonesian growers conform to higher agricultural standards through a minimum set of best management practices (Obidzinski et al. 2013). It was the first national standard of its kind and other countries have now begun to consider implementing similar standards to ensure sustainable practices among all palm oil producers. Malaysia has launched its own voluntary certification standard MSPO, to overcome growers concerns with the RSPO about differing views of auditors, costly certification charges, and evolving criteria (Sharma 2013).

Despite the above-described efforts by governments and roundtable groups, the European market and consumers are still pushing for better transparency of palm oil source especially in food (Economist 2010). However, one of the biggest problems of the certification process is the one of traceability (Levin et al. 2012). The value chain for palm oil is notoriously complex, and it is technically difficult to trace individual palm oil back to its sources. It is common practice to mix palm oil supplies from different sources at various stages along the value chain (M. A. Teo, personal communication). This is the case particularly where oil palm mills rely on outgrower schemes, which consist of independent smallholder farmers. Therefore, it is largely impossible to trace the oil purchased back to a single source by the end user. As of , only 14% of the 1821 RSPO-certified supply chain certificate holders can sufficiently document their entire value chain to be linked to sustainable palm oil sources (RSPO 2015b).

Compliance with certification standards is also easier for old plantations as opposed to newly established ones. With land becoming scarce, both in Indonesia and Malaysia, new value chain actors are forced to expand into areas that are problematic, not only environmentally but also socially (Andersen et al. 2016). Between 1990 and 2010, Kalimantan (Indonesia) has seen a massive expansion of oil palm areas into forests. According to Carlson et al. (2013), 47% of the new plantations are established on primary forests, 22% on echar un vistazo en el enlace logged over forests, and 21% on agroforests. Expansions in Sarawak (Malaysia) have shown that between 2005 and 2010 alone just under two-thirds of the 350,000 ha of peat swamp were opened up (SarVision 2011).